# 196J Firm Radha !\isl.an (Dttta.std1 RtPrt· stnttd by li~ri KisMn v. Admitiistralot, Munitipal Commilttt, I.udhi1na

- **Citation:** [1964] 2 S.C.R. 286
- **Court:** Supreme Court of India
- **Decided:** 1961-03-31
- **Case number:** CIVIL APPELLA.TE JURISDICTION: Civil Appeal No. 870 of 1962
- **Bench:** A. K. Sarkar, K. N. WANcnoo, K. c. DAS G"CPTA
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/196j-firm-radha-isl-an-dttta-std1-rtprt-stnttd-by-li-ri-kismn-v-admitiistralot-2926
- **Pages:** 7

## Headnote

SaU.. Tax-Escaptd As81W3ment-Re-assessmnt-Power8
and duties-Deltgation o/-Madh!fa Prade.h General Saks 1'ax
Act, 1!158 (M. P. 2 of /9.50), "· 19, 30.
Section 19 of the M, P. General Sales Tax Act, 1958
empowers the Commissioner, if he is
satisfied that any sale
or purchase of goods has em•ped assessment, to re.assess the
tax payable and to levy a penalty. Section 30 empowers the
Commissioner to "delegate any of hi! powers and duties
under this Act.'' The Commis,ioncr delegated to AS!istant
Commissioners his "powers and duties" to make an assessment
or reassessment of tax or penaJty and to exercise all other
powers under ss. 18, 19 and 20,
The A'5istant Commissioner
gave a notice to the appellant that he was sati<fied that sales
from
1.4.1957
to
31.3.1958 had escaped assessment and
assessed him to an additional tax and penalty. The appellant
contented that the Commissioner
had delegated only his
power under '· 19 and not the duties and accordingly the
Assistant
Commiosioner could validly re-assess the a1.pellan1
-
2 S.C.R.
SUPREME COURT REPORTS
287
only after the Commissioner had been satisfied personally that
sales had escaped assessment.
Held, that the order of re-assessment and penalty made
by the Assistant Commissioner was valid. The requirement
of his satisfaction before exercising the power
to re-assess
under s. 19 did not impose any duty on the Commissioner ; it
was really a condition or limitation of the exercise of that
power.
Even if this requirement a; to satisfaction be considered as a duty, it was an adjunct to the exercise of the power
to re-assess and it passed necessarily with the delegation of
the power. It would make no difference even if the conditions
precedent to the exercise of the power were more than one as
they had no independent existence and were merely attached
to the power.
Mungoni v.
Attorney-General [1960] A. C. 336 and
Hazrat Syed Shah Mastarshid Ali Al Quadari v. Commissioner
of Wakfs, West Bengal, [1961] 3 S.C.R. 759, relied on.
CIVIL APPELLA.TE JURISDICTION: Civil Appeal
No. 870 of 1962.
Appeal by special leave from the judgment and
order dated April 5, J 962, of the Madhya Pradesh
High Court at Jabalpur in M. P. No. 14of1962.
U. M. Trivedi, Shanti Swarup Khanduja and
Ganpat Rai, for the appellant.
M. Adhikari, Advocate-General for the State
of Madhya Pradesh and l .. N. Shroff,
for the
respondents.
1963. March 8.
The Judgment of the Court
was delivered by
SARKAR J.-The appellant had been assessed to
sales tax for the year 1957-58 under the Madhya
Bharat Sales Tax Act, 1950.
This Act was repealed
on April 1, 1959, by the Madhya Pradesh General
Sales Tax Act, 1958. On December 31, 1960, a
notice was issued to the appellant by an Assistant
Commissioner of Sales Tax under the 1958 Act
1963
Mis Daluram
PannolaJ Modi
v.
4sJistant Commissio·
ntr oj Salu Tax
SarktJr /.
1963
M /s. Da/urom
Ptlllnalal Alodi
v.
Aui1ta11t CommiJsio·
rur oj Salts T tv:
Sarkar J,
288
SUPREME COURT REPORTS[l964]VOL.
wherein it was stated, "I am satisfied that your sale
during the period from l.4-l!J57 to 31-3-58 ........... .
has escaped assessment and thereby rendered yourself
liable to be reassessed under s. l!l (I) of the Act."
Pursuant to this notice fresh assessment proceedings
were
started by the
Assistant Commissioner in
respect of the sales in the year 1!!57-58 and on
March 31, 1961, he made an order imposing an
additional tax on the appellant of Rs. :H ,250/- for
that year and a penalty of Rs. 15,000/-. The appellant moved the High Court of Madhya Pradesh for
a writ of certiorari to quash the order but was unsuccessfu I. It has now appealed to this Court against
the judgment of the High Court.
We will first set out the material portion of
s. 19 (1) of the Act of 19:i8 under which the assess·
ment was made :
"Where an assessment has been made under
this Act and the Commissioner, in consequence
of any information which has come into his
possession, is satisfied that any sale or purchase
of goods chargeable to
tax und

## Text

196J
Firm Radha !\isl.an
(Dttta.std1 RtPrt·
stnttd by li~ri KisMn
v.
Admitiistralot, Munitipal Commilttt,
I.udhi1na
Subba Ran J.
1963
March 8
286 SUPREME COURT REPORTS [1964] VOL.
present case the mistake, if any, committed in
imposing the terminal tax can only be corrected in
the manner rrcscribed by the Act.
The appellants
have misconceived their remedy in filing the suit in
the civil Court.
The conclusion arrived at by the
High Court is correct.
In the result, thr appeal fails and is dismissed
with costs.
Appeal dismissed.
M/s. DALURAM PANNALAL MODI
v.
THE ASSISTANT COMMISSIONER OF
SALES TAX ETC.
(A. K. SARKAR, K. N. WANcnoo and
K. c. DAS G"CPTA JJ.)
SaU.. Tax-Escaptd As81W3ment-Re-assessmnt-Power8
and duties-Deltgation o/-Madh!fa Prade.h General Saks 1'ax
Act, 1!158 (M. P. 2 of /9.50), "· 19, 30.
Section 19 of the M, P. General Sales Tax Act, 1958
empowers the Commissioner, if he is
satisfied that any sale
or purchase of goods has em•ped assessment, to re.assess the
tax payable and to levy a penalty. Section 30 empowers the
Commissioner to "delegate any of hi! powers and duties
under this Act.'' The Commis,ioncr delegated to AS!istant
Commissioners his "powers and duties" to make an assessment
or reassessment of tax or penaJty and to exercise all other
powers under ss. 18, 19 and 20,
The A'5istant Commissioner
gave a notice to the appellant that he was sati<fied that sales
from
1.4.1957
to
31.3.1958 had escaped assessment and
assessed him to an additional tax and penalty. The appellant
contented that the Commissioner
had delegated only his
power under '· 19 and not the duties and accordingly the
Assistant
Commiosioner could validly re-assess the a1.pellan1
-
2 S.C.R.
SUPREME COURT REPORTS
287
only after the Commissioner had been satisfied personally that
sales had escaped assessment.
Held, that the order of re-assessment and penalty made
by the Assistant Commissioner was valid. The requirement
of his satisfaction before exercising the power
to re-assess
under s. 19 did not impose any duty on the Commissioner ; it
was really a condition or limitation of the exercise of that
power.
Even if this requirement a; to satisfaction be considered as a duty, it was an adjunct to the exercise of the power
to re-assess and it passed necessarily with the delegation of
the power. It would make no difference even if the conditions
precedent to the exercise of the power were more than one as
they had no independent existence and were merely attached
to the power.
Mungoni v.
Attorney-General [1960] A. C. 336 and
Hazrat Syed Shah Mastarshid Ali Al Quadari v. Commissioner
of Wakfs, West Bengal, [1961] 3 S.C.R. 759, relied on.
CIVIL APPELLA.TE JURISDICTION: Civil Appeal
No. 870 of 1962.
Appeal by special leave from the judgment and
order dated April 5, J 962, of the Madhya Pradesh
High Court at Jabalpur in M. P. No. 14of1962.
U. M. Trivedi, Shanti Swarup Khanduja and
Ganpat Rai, for the appellant.
M. Adhikari, Advocate-General for the State
of Madhya Pradesh and l .. N. Shroff,
for the
respondents.
1963. March 8.
The Judgment of the Court
was delivered by
SARKAR J.-The appellant had been assessed to
sales tax for the year 1957-58 under the Madhya
Bharat Sales Tax Act, 1950.
This Act was repealed
on April 1, 1959, by the Madhya Pradesh General
Sales Tax Act, 1958. On December 31, 1960, a
notice was issued to the appellant by an Assistant
Commissioner of Sales Tax under the 1958 Act
1963
Mis Daluram
PannolaJ Modi
v.
4sJistant Commissio·
ntr oj Salu Tax
SarktJr /.
1963
M /s. Da/urom
Ptlllnalal Alodi
v.
Aui1ta11t CommiJsio·
rur oj Salts T tv:
Sarkar J,
288
SUPREME COURT REPORTS[l964]VOL.
wherein it was stated, "I am satisfied that your sale
during the period from l.4-l!J57 to 31-3-58 ........... .
has escaped assessment and thereby rendered yourself
liable to be reassessed under s. l!l (I) of the Act."
Pursuant to this notice fresh assessment proceedings
were
started by the
Assistant Commissioner in
respect of the sales in the year 1!!57-58 and on
March 31, 1961, he made an order imposing an
additional tax on the appellant of Rs. :H ,250/- for
that year and a penalty of Rs. 15,000/-. The appellant moved the High Court of Madhya Pradesh for
a writ of certiorari to quash the order but was unsuccessfu I. It has now appealed to this Court against
the judgment of the High Court.
We will first set out the material portion of
s. 19 (1) of the Act of 19:i8 under which the assess·
ment was made :
"Where an assessment has been made under
this Act and the Commissioner, in consequence
of any information which has come into his
possession, is satisfied that any sale or purchase
of goods chargeable to
tax under this Act,
during any year ...... has escaped assessment. ..
... ... the Commissioner may, ......... after giving
the dealer a reasonable opportunity of being
heard and after making such enquiry as he
considers necessary, proceed, in such manner
as may be prescribed, to re-assess the tax payable on such s?.le or purchase and the Commis·
sioner may direct that the dealer shall pay, hy
way of penalty in addition to the amount of tax
so assessed, a sum not exceeding that amount."
It is necessary also to refer to s. 30 of the Act which
authorises the Commissioner to "delegate any of his
powers and duties under this Act", subject to certain
restrictions and exceptions which do
not require
consideration in this case, to Assistant Commissioners
and certain other officers. The Commissioner made an
2 S.C.R.
SUPREME COURT REPORTS
289
order under this section on April 1, 1959, delegating
to Assistant Commissioners his "powers and duties
specified in column (3) of the table" set out in the
order. That column was headed
''Description of
Powers'' and contained the following : To make an
assessment or re-assessment of tax or penalty ....... ..
and to exercise all other powers u/s. 18, 19 and 21."
It
was said that the
power to
re-assess
conferred by s. 19 (1) on the Commissioner was
subject to various duties one of which was that he
had to be satisfied that sales had escaped assessmeut,
without the performance of which duties the power
could not be exercised.
It was contended that
though provision had been made by s. 30 for the dele·
gation of duties, the Commissioner had by his order
of April 1, 1959, delegated only his power under s. 19
but not the duties.
Therefore, it was argued, that
the Assistant 8ommissioner to whom the power had
been delegated, could validly exercise that power
only after the Commissioner had been
satisfied
personally that sales had escaped assessment.
It was
lastly said that as the Assistant Commissioner had
exercised the power to re-assess on his own satisfac·
tion that sales had escaped assessment, the exercise
of the power was void.
Section 19 (1) no doubt required that the
Commissioner had to be satisfied
that sales had
escaped assessment before he could proceed to exer·
cise his power to re-assess.
It is true that without
such satisfaction there could be no re-assessment.
But we do not think that by this requirement the
section imposed any duty on the Commissioner.
The
Commissioner's satisfaction was necessary only if he
wanted to exercise his power to re-assess and was
really a condition or limitation of the exercise of that
f'ower.
Apart from the exercise of such power it
had no purpose and no _existence.
Even if the
requirement as to satisfaction was to be considered as
1963
M/s. Da!uram
Pannalal ,\Jodi
v.
Assistant Commis1i9.
ner of Sales Tax
Sllrkar J,
1963
M/s. Dcluram
1'"'11alol M ~i
v.
siJ.,,., c~"'misJio·
,.,, ef So/eJ Tt1x
Sorkt1r J.
290 SUPREME COURT RE.PORTS [1964] voi.
a duty, it was a duty which had been created only as
an adjunct to the exercise of the power, a duty which
passed necessarily with the delegation of the power.
That seems to us to be also commonsense for when
a power is delegated it is intended that the delegate
would exercise it and therefore it must have been
intended that he would perform all the conditiom
precedent to the exercise of the power.
The view that we have taken of this case was
taken by the Judicial Committee of a similar statute
in the case of 11J:ungoni v. Attorney Geneml ('),and that
case was cited with approval by this Court in 1/azrat
Syed Shah Jlastershid Ali Al (laurlari v. Commissioner of Wakfs, West
Btn!f<!l ('), where it was
observed, "Where powers and duties a.-e inter.connected and it is not possible to separate one from the
other in srich wise that powers may be delegated while
duties arc retained and vice ver->a. the delegation of
powers takes with it the duties."
The duty of being
satisfied---if at all it was one--being inseparably
connected with the power to re-assess and passing to
a delegate along with it, was not a duty which could
be independently delegated and was not, therefor~,
a duty the delegation of which could be made under
s. 30. We, therefore,
think that
the
Assistant
Commissioner, as the delegate of the power to re·
assess, duly exercised the power on his own satisfaction that sales had escaped assessment.
Then it was said that Jfongoni's wse ('),and
the cases taking the same view, some of which were
mentioned in the judgment of the High Court, were
of no assistance for the statutes in those cases required
only one thing to be done bef1ire the p<:iwcr conferred
could be
exercised,
whereas s. l!l (I) of the
Act of I 958 required a number of things to be so
done. It was, therefore, contended that it could not
be said in the present case that the things which had
to be done before the power could be exercised were
(I) [1960) A.C. 3~.
(2) [1961) 3 S.C.R. 759.
-
,
I
.
.-
.
.
.
.
2 S.C.R.
SUPREME COURT REPORTS
291
not duties which could be delegated under s. 30.
In M-ur1goni's case (1), no doubt there was only one
condition precedent and we will assume that in the
cases referred to in the judgment of the Higll Court,
the position was the same. We will also assume that
sub·s. (1) of s. 19 required a number of things to be
done before the power to re-assess could be exercised
though as at present advised, we doubt if it did. We
are however wholly unable to appreciate how the
number of conditions precedent could lead to the
view that they were independent duties which could
be separately delegated. It seems to us that inspite
of their number, they remain nonetheless conditions
precedent and therefore conditions or limitations of
the exercise of the power.
They had, like a single
condition precedent, no independent existance. If in
the case of a single contilition precedent it has to be
held on the authority of Mungoni's case ('), that the
requirement of its performance passed with the delegation of the power to which it was attached. we
think that a delegation of a power would take with it
all the conditions precedent attached to it whatever
be their number. We are unable to distinguish the
present case from Mungoni's case (1).
-
The other objection to tl:~e validity of the order
is that it was in respect of sales which had earlier
been assessed under the Act of 1950 as sales by one
Gajanand Satyanarayan and could not therefore be
assessed
again. This earlier assessment had been
cancelled by an order made under s. 39 (2) of the
Act of 1958. But it was said that that order could
not cancel the assessment
which was
under the
1950 Act, for under s. 39 (2) only an order under
the 1958 Act could be cancelled. It se001s to us that
in order to uphold tb e validity of the re-assessment
order made in this case it is not necessary that the
assessment order made on Gajanand Satyanarayan
should have been cancelled. We will assume that
the sales covered by the order against Gajanand
(I) [1960] A.O. 336.
1963
M/s. Da!uram
Pannttlal Motii
v.
AssiJlant Commissio •
ner of Sales TM
Sarkar J.
1963
M/1. D•I"'""'
Pann,/a/ Modi
v.
Assistani CommissiP-
,.,, of Salts Tax
Sarkat J.
292 SUPREME COURT REPORTS [1964] vot..
Satyanarayan were the same as those with which the
order in hand is concerned.
In the re-assessment
proceedings however it was found as a fact that
Gajanand Satyanarayan was a name only and that
no real person bearing that name ever existed. That
finding cannot be challenged in the present proceedings and that being so, it seems to us that the assessment order upon Gajanand Satyanarayan was a
nullity.
Obviously, no assessment could be made
under the Act on a non-existent person. If that
order was a nullity-and the learned counsel has not
been able to show how it could have been otherwiseit could not stand in the way of the re-assessment of
the appellant at all. The second challenge to the
impugned order must, therefore, also be rejected.
Learned counsel for the appellant had sought
to raise two other points but he was not permitted
to do so because these points were not mentioned in
the petition for the writ nor raised at any earlier
stage.
We
will
however state them here but
without expressing any opinion of our own a~ to their
tenability.
The first of these points was that under
s. 19 (1) of the 19ii8 Act only those sales could be
re-assessed which were chargeable to tax under that
-
Act and the sales brought to tax under the present
-
order were of sugar, a commodity the sale of which
was not chargeable under the Act.
The other point
was that penalty had been imposed by the impugned
order under s. Hof the Act of l 950 but this was illegal
since the 1950 Act had been repealed and the right
to impose a penalty under the repealed Act had not
been saved by the saving section. namely, s. 52.
In the result this appeal must fail and it is,
therefore, dismissed with costs.
Appeal dismissed.